Senator Mike Rounds found himself involved in a slight controversy over his willingness to break with his fellow South Dakota delegation members in Washington, and joined a group of Senators who were willing to put changes to the inheritance tax on the table as part of a tax reform package to be negotiated.
In the Tri-State Neighbor newspaper, Mike explains why he believes it’s worth talking about:
As with any policy discussion, we recognize that in order to get the votes necessary to pass legislation, we will not all be able to get everything we want. Legislating sometimes requires compromise. Because some of my colleagues are opposed to repealing the death tax, I recently expressed an openness to raising the exemption on the death tax – to $30 million per family vs. $10.98 million today – if that is what it takes to get enough votes to pass comprehensive reform. Increasing the exemption would benefit every family-owned operation in South Dakota, while comprehensive tax reform would benefit every family in our state, farm and non-farm alike. It’s a situation in which we cannot let perfect get in the way of good – or in this case, really, really good.
We must also be careful that a full repeal of the death tax does not have unintended consequences. Many farmers today use the Family Limited Partnership under the gift tax rule, which is tied to the death tax under the U.S. tax code. If the death tax is eliminated, there is uncertainty with how gift rules would apply. As all farmers know, it is important to know the basis of your land value to understand how taxes would be applied.
While we still have a long road ahead of us in the tax reform discussion, we made progress… by passing a budget resolution, the first step to enacting meaningful tax reform that simplifies the code, lowers the rates for every South Dakotan and jolts our sluggish economy. As the tax reform debate moves forward, I will work to make certain our tax policies are fair to those who work hard, become successful, and wish to pass their businesses on to the next generation.
What are your thoughts?